Judy Lin / Sacbee.com

As California’s housing slump punches through the state economy, it’s leaving bruises on the state budget.

Four months into the 2007-08 budget year, state revenue is $1.1 billion below what was forecast. The decline can be seen in all major revenue streams – both state and local – including property, income, sales and corporate taxes.

Elected officials have been advised to keep expectations low for the rest of the fiscal year, which ends June 30. Last week the Legislature’s chief analyst predicted state revenue for the year would be $3.8 billion below the original forecast.

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Adam Doster / therawstory

While the housing foreclosure crisis of 2007 negatively impacted many homeowners with shaky financial histories, thousands of families are losing their homes without ever missing a payment. These residents are renters who had the unfortunate luck of living in houses whose landlords defaulted on their mortgages — a large but little noticed externality of the subprime fallout.

While it remains unclear many renters have been evicted because of foreclosures, the Mortgage Bankers Association took a survey earlier this year and found that one in eight foreclosures was non-owner-occupied. But the association acknowledges that this figure likely “underestimates the problem” because building managers have an incentive to register as owner-occupied for tax reasons, even if the units are rented.

According to the New York Times, “in Nevada, which has one of the highest foreclosure rates in the country, 28 percent of mortgages that were in default earlier this year were for homes not owner-occupied, more than twice the national average.” Arizona, Florida, and California, all states hit hard by foreclosures, are well above the national average as well.
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Jim Christie / Reuters

LAS VEGAS (Reuters) - Housing prices in Southern California fell to a two-and-a-half-year low in October and the region’s home sales slumped 45 percent from a year earlier as lenders issued fewer “jumbo” mortgages, according to a report released on Wednesday.

The median price paid for a home in Southern California in October fell to $444,000, down 8 percent from a year earlier and the lowest level since April 2005, according to the report by DataQuick Information Systems, a real estate information service.

The median price was down 3.9 percent from September, DataQuick said.
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BY SANDRA BAKER / STAR-TELEGRAM STAFF WRITER

Fort Worth-based D.R. Horton, struggling with falling home sales amid the national housing slump, sold nearly 7,000 acres in Arizona for $70 million to two real estate firms that formed a joint venture to develop and sell the land.

The Wolff Co., based in Scottsdale, Ariz., and Langley Properties, based in Gilbert, Ariz., said Monday that the land — 6,884 acres — is in Casa Grande, near Phoenix, where Horton has been actively building. The property is zoned for 23,050 residential lots, which will be sold to home builders. The parcel includes 450 acres of commercial land that will be developed or sold, the companies said.

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The number of homes in foreclosure in the third quarter of 2007 skyrocketed compared with the same quarter last year. Some experts say all the loan bailout programs have been too little, too late.
By Melinda Fulmer

Workout efforts have been too little and too late to stem the surge of foreclosures that continues to roil housing and financial markets.

The number of homes entering some stage of foreclosure jumped almost 100% in the third quarter from the same time a year ago and 30% from last quarter, according to RealtyTrac, of Irvine, Calif., with a sizable jump in the number of homes completing the foreclosure process and being taken back by the bank (referred to as real-estate owned, or REO).
To view all of this article, please visit this link at MSN Real Estate

Residential mortgages were more difficult to get over the past three months than at any time in the 17-year history of the Federal Reserve’s survey of banks. Standards for other types of loans tightened too, while demand fell.
By Rex Nutting, MarketWatch

Major banks made it much tougher for all types of customers to get loans over the past three months, according to the Federal Reserve’s quarterly survey of bank lending officers.

This summer’s credit squeeze prompted an unprecedented tightening in lending standards at major banks. As credit standards toughened, demand for loans also fell, the Fed reported Nov. 5, providing some fresh details on the fallout from the credit crunch.

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Pace of those forced from homes continued to rise in the third quarter

By John W. Schoen / Senior Producer / MSNBC

Foreclosure rates continued to rise in the third quarter in most of the top 100 largest metropolitan areas of the country, according to the latest data from RealtyTrac, a Web site that logs foreclosure filings.

Stockton, Calif., saw the highest rate of foreclosures — with one filing for every 31 households — a rise of 32 percent from the second quarter and more than five times the rate of last year’s third quarter. Foreclosures in Detroit were up 92 percent from the second quarter of this year; the pace in California’s Riverside-San Bernardino area rose 39 percent.

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Prices will sink even deeper. When it comes to housing, 2008 will be one bleak house scenario.

Amanda Gengler, Money Magazine writer-reporter

Although home prices nationwide are down 4.2 percent from a year ago, “the worst is yet to come,” says Joshua Shapiro, chief U.S. economist at consulting firm Maria Fiorini Ramirez.

Just how bad will it get? According to Fiserv Lending Solutions, the median home price nationwide is expected to tumble 5.7 percent next year, which would make it the worst year for real estate in at least 40 years.

And some previously sizzling markets in places like Florida and Nevada will likely suffer double-digit drops. “You’ll probably see a turnaround sooner in the Northeast because there wasn’t as much overbuilding,” says Patrick Newport of Global Insight, an economic forecasting firm. Even some midwestern cities like Cleveland and Detroit, which never experienced a boom, could see modest drops due to their ailing economies.

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AFX News Limited / Thomson Financial / Forbes.com

The rate of home foreclosures in the US is expected to remain above normal levels for the next 18 months, as interest rate resets on more than 2 mln mortgages will continue to put a strain on borrowers, Undersecretary of Treasury for Domestic Finance Robert Steel said today.

In a prepared testimony before the House Financial Services Committee, Steel said the normal rate of foreclosures from 2001 to 2005 was about 1.7 pct, or about 650,000 foreclosures per year.

Steel’s testimony added that problems in the subprime market will clearly increase the rate, but did not specify how much larger it might be, although Treasury Secretary Henry Paulson has predicted that there would be more than 1 mln foreclosures by the end of this year.

To view all of this article, please visit this link at Forbes.com

Al Yoon / Reuters

Residential foreclosure filings nearly doubled last quarter from a year earlier, and appear set to increase into 2008, a report said on Thursday.

Foreclosure filings for July-September rose to 635,159, representing one in every 196 households and a 30 percent jump from the second quarter, according to RealtyTrac, a marketer of foreclosure properties based in Irvine, California.

The level climbed in 45 out of 50 states in the quarter, led by Nevada, California and Florida, the report said. Little relief is expected as rising payments on some $650 billion in adjustable-rate loans from the current quarter through the end of 2008 will continue to pinch homeowners’ budgets.
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